More people self-employed for long term, ONS finds

Nearly half the UK’s growing number of self-employed people have been working for themselves for a decade or more, according to new analysis.

While popular representations of the self-employed have focused on the extremes – the well-paid software developer or part-time cleaner – research from the Office for National Statistics suggests there has been growth in many industries, with the largest groups of self-employed being building workers, professionals and other service providers – such as Zumba dance fitness instructors.

It also found that, at the end of March, 22 per cent of Britain’s 4.5m self-employed had been working for themselves for more than 10 years, with another 24 per cent for 20 years or more.

Nick Palmer, senior labour market statistician at the ONS, said there was little evidence that the rise in self-employment had been a “last resort” and the overall increase was the result of people remaining self-employed for longer, rather than an influx of newly self-employed people. Only about 5 per cent reported actively looking for a different or additional or paid job, compared with about 8 per cent of employees.

A survey for the Resolution Foundation by Ipsos Mori found more than a quarter of those who became self employed after losing their job in the past five years would prefer a salaried job. But the ONS looks at the total pool of the self-employed rather than just those who have recently become so.

Labour market economist John Philpott said there were are at least two distinct groups among the self-employed: those who make it work on a long-term basis, and those who dip in and out, either for reasons of adversity or because they are testing the water.

“A lot of people probably exaggerate the degree of slack in self-employment and they ignore the fact there are a number of people there for the duration,” he said.

Rising self-employment has accounted for around a third of the total growth in employment since 2010. One of the most important judgments policy makers need to make is whether the rise masks under- and unemployment.